Correlation Between MCB Investment and Habib Metropolitan
Can any of the company-specific risk be diversified away by investing in both MCB Investment and Habib Metropolitan at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining MCB Investment and Habib Metropolitan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MCB Investment Manag and Habib Metropolitan Bank, you can compare the effects of market volatilities on MCB Investment and Habib Metropolitan and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in MCB Investment with a short position of Habib Metropolitan. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCB Investment and Habib Metropolitan.
Diversification Opportunities for MCB Investment and Habib Metropolitan
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between MCB and Habib is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding MCB Investment Manag and Habib Metropolitan Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Habib Metropolitan Bank and MCB Investment is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on MCB Investment Manag are associated (or correlated) with Habib Metropolitan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Habib Metropolitan Bank has no effect on the direction of MCB Investment i.e., MCB Investment and Habib Metropolitan go up and down completely randomly.
Pair Corralation between MCB Investment and Habib Metropolitan
Assuming the 90 days trading horizon MCB Investment Manag is expected to generate 1.37 times more return on investment than Habib Metropolitan. However, MCB Investment is 1.37 times more volatile than Habib Metropolitan Bank. It trades about 0.57 of its potential returns per unit of risk. Habib Metropolitan Bank is currently generating about 0.26 per unit of risk. If you would invest 4,065 in MCB Investment Manag on September 13, 2024 and sell it today you would earn a total of 2,734 from holding MCB Investment Manag or generate 67.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MCB Investment Manag vs. Habib Metropolitan Bank
Performance |
| Timeline |
| MCB Investment Manag |
| Habib Metropolitan Bank |
MCB Investment and Habib Metropolitan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCB Investment and Habib Metropolitan
The main advantage of trading using opposite MCB Investment and Habib Metropolitan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCB Investment position performs unexpectedly, Habib Metropolitan can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Habib Metropolitan will offset losses from the drop in Habib Metropolitan's long position.| MCB Investment vs. Metropolitan Steel Corp | MCB Investment vs. Roshan Packages | MCB Investment vs. Unilever Pakistan Foods | MCB Investment vs. Agha Steel Industries |
| Habib Metropolitan vs. Big Bird Foods | Habib Metropolitan vs. Pakistan Telecommunication | Habib Metropolitan vs. Reliance Insurance Co | Habib Metropolitan vs. Ghandhara Automobile |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |